Flowserve (NYSE:FLS) - Share price, News & Analysis

Q: What is the Fair Price of FLS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

FLS ($29.1) is trading below our estimate of [[fair value]] ($55.33)

FLS fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	1/6
Financial Health	5/6
Dividends	4/6

FLS Stock Overview

Flowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally.

Rewards

Trading at 47.4% below our estimate of its fair value

Earnings are forecast to grow 54.24% per year

Risk Analysis

Dividend of 2.75% is not well covered by earnings

Large one-off items impacting financial results

Flowserve Competitors

John Bean Technologies

NYSE:JBT

US$3.6b

Welbilt

NYSE:WBT

US$3.4b

Evoqua Water Technologies

NYSE:AQUA

US$3.9b

Timken

NYSE:TKR

US$4.1b

Price History & Performance

Summary of all time highs, changes and price drops for Flowserve
Historical stock prices
Current Share Price	US$29.10
52 Week High	US$43.63
52 Week Low	US$27.50
Beta	1.59
1 Month Change	-8.17%
3 Month Change	-17.84%
1 Year Change	-26.65%
3 Year Change	-44.93%
5 Year Change	-38.01%
Change since IPO	653.67%

Recent News & Updates

May 30

Flowserve (NYSE:FLS) Is Due To Pay A Dividend Of US$0.20

Flowserve Corporation's ( NYSE:FLS ) investors are due to receive a payment of US$0.20 per share on 8th of July. Based...

May 16

Flowserve (NYSE:FLS) Will Pay A Dividend Of US$0.20

Flowserve Corporation ( NYSE:FLS ) will pay a dividend of US$0.20 on the 8th of July. This makes the dividend yield...

Shareholder Returns

	FLS	US Machinery	US Market
7D	2.4%	-1.1%	1.7%
1Y	-26.6%	-20.6%	-20.4%

Return vs Industry: FLS underperformed the US Machinery industry which returned -19.8% over the past year.

Return vs Market: FLS underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is FLS's price volatile compared to industry and market?
FLS volatility
FLS Average Weekly Movement	5.3%
Machinery Industry Average Movement	6.0%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: FLS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: FLS's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1912	15,000	Robert Rowe	https://www.flowserve.com

Flowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally. It operates in two segments, Flowserve Pump Division (FPD) and Flow Control Division (FCD). The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines.

Flowserve Fundamentals Summary

How do Flowserve's earnings and revenue compare to its market cap?
FLS fundamental statistics
Market Cap	US$3.83b
Earnings (TTM)	US$96.05m
Revenue (TTM)	US$3.50b

39.6x

P/E Ratio

1.1x

P/S Ratio

Is FLS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FLS income statement (TTM)
Revenue	US$3.50b
Cost of Revenue	US$2.49b
Gross Profit	US$1.02b
Other Expenses	US$919.67m
Earnings	US$96.05m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.74
Gross Margin	28.98%
Net Profit Margin	2.74%
Debt/Equity Ratio	71.1%

How did FLS perform over the long term?

See historical performance and comparison

Dividends

2.7%

Current Dividend Yield

109%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is FLS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FLS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FLS. This is calculated by dividing FLS's market cap by their current preferred multiple.
What is FLS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.83b

FLS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.4x
Enterprise Value/EBITDA	14.9x
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

How does FLS's PE Ratio compare to its peers?

FLS PE Ratio vs Peers

The above table shows the PE ratio for FLS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	40.3x
JBT John Bean Technologies	30.6x	18.5%	US$3.6b
WBT Welbilt	46.2x	55.7%	US$3.4b
AQUA Evoqua Water Technologies	73.5x	33.8%	US$3.9b
TKR Timken	10.9x	13.0%	US$4.1b
FLS Flowserve	39.6x	54.2%	US$3.8b

Forward PE

Price-To-Earnings vs Peers: FLS is good value based on its Price-To-Earnings Ratio (39.6x) compared to the peer average (40.3x).

Price to Earnings Ratio vs Industry

How does FLS's PE Ratio compare vs other companies in the US Machinery Industry?

Price-To-Earnings vs Industry: FLS is expensive based on its Price-To-Earnings Ratio (39.6x) compared to the US Machinery industry average (21.5x)

Price to Earnings Ratio vs Fair Ratio

What is FLS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FLS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	39.6x
Fair PE Ratio	47.8x

Price-To-Earnings vs Fair Ratio: FLS is good value based on its Price-To-Earnings Ratio (39.6x) compared to the estimated Fair Price-To-Earnings Ratio (47.8x).

Share Price vs Fair Value

What is the Fair Price of FLS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FLS ($29.1) is trading below our estimate of fair value ($55.33)

Significantly Below Fair Value: FLS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: FLS is good value based on its PEG Ratio (0.7x)

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Future Growth

How is Flowserve forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

54.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FLS's forecast earnings growth (54.2% per year) is above the savings rate (1.9%).

Earnings vs Market: FLS's earnings (54.2% per year) are forecast to grow faster than the US market (13.8% per year).

High Growth Earnings: FLS's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FLS's revenue (5.8% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: FLS's revenue (5.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FLS's Return on Equity is forecast to be low in 3 years time (14.4%).

Discover growth companies

Past Performance

How has Flowserve performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FLS has a large one-off loss of $54.3M impacting its March 31 2022 financial results.

Growing Profit Margin: FLS's current net profit margins (2.7%) are lower than last year (3.6%).

Past Earnings Growth Analysis

Earnings Trend: FLS's earnings have grown by 14.4% per year over the past 5 years.

Accelerating Growth: FLS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FLS had negative earnings growth (-27.4%) over the past year, making it difficult to compare to the Machinery industry average (24%).

Return on Equity

High ROE: FLS's Return on Equity (5.9%) is considered low.

Discover strong past performing companies

Financial Health

How is Flowserve's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: FLS's short term assets ($2.4B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: FLS's short term assets ($2.4B) exceed its long term liabilities ($1.8B).

Debt to Equity History and Analysis

Debt Level: FLS's net debt to equity ratio (38.9%) is considered satisfactory.

Reducing Debt: FLS's debt to equity ratio has reduced from 93.8% to 71.1% over the past 5 years.

Debt Coverage: FLS's debt is not well covered by operating cash flow (14.7%).

Interest Coverage: FLS's interest payments on its debt are well covered by EBIT (4.6x coverage).

Balance Sheet

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Dividend

What is Flowserve current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.75%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FLS's dividend (2.75%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: FLS's dividend (2.75%) is low compared to the top 25% of dividend payers in the US market (4.25%).

Stability and Growth of Payments

Stable Dividend: FLS's dividends per share have been stable in the past 10 years.

Growing Dividend: FLS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (108.5%), FLS's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (80.8%), FLS's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average management tenure

CEO

Robert Rowe (50 yo)

5.17yrs

Tenure

US$12,478,105

Compensation

Mr. Robert Scott Rowe has been Chief Executive Officer and President of Flowserve Corporation since April 1, 2017. Mr. Rowe served as Interim President of Flowserve Pumps Division at Flowserve Corporation...

CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD12.48M) is above average for companies of similar size in the US market ($USD6.87M).

Compensation vs Earnings: Robert's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: FLS's management team is considered experienced (4.2 years average tenure).

Board Members

Experienced Board: FLS's board of directors are considered experienced (5.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31